Germany says borrowing more money to compete with the U.S. would be a ‘threat’ to Europe

Germany said Europe shouldn't borrow more money to compete with the U.S.

The EU is concerned that the U.S. Inflation Reduction Act is a threat to European businesses. European Commission President Ursula von der Leyen said new and additional funding at the EU level will be needed to make European companies more competitive.

Her idea was skeptical in Berlin.

German Finance Minister Christian Lindner told CNBC that the Inflation Reduction Act of the U.S. is an opportunity for Germany to reconsider its competiveness.

Ursula von der Leyen's idea of a European sovereignty fund needs to be further debated. I am open for discussion if that is the case. He said that if sovereignty funds mean new European debt, it would be a threat to our stability.

There are no formal proposals on the table for the ideas proposed by the head of Europe's executive arm. The commission thinks the bloc should be in a better position to compete with the US.

The IRA includes a record amount of money for climate and energy policies. Tax credits for electric cars made in North America are part of the landmark package.

Von der Leyen said that producers are considering relocating investment from Europe to the U.S.

According to the Financial Times, Northvolt is considering expanding its production in the US and benefiting from some of the subsidies. The company may delay a decision on a new plant in Germany.

Dutch Finance Minister Sigrid Kaag told CNBC Monday that she prefers to take stock of what's already out there in terms of funding for green initiatives and either re-purpose or refocus.

If we were all using the taxpayers money in different parts of the world to compete with each other, it would be a lose-lose, according to Ireland's finance minister.

U.S. and EU officials have held several talks on how to adapt some of the rules within the IRA to take into account concerns in Europe. On Monday, there was a meeting in Maryland.

The work of the U.S.-EU Task Force on the Inflation Reduction Act was noted. We acknowledge the EU's concerns and reiterate our commitment to address them in a constructive way.

The president said last week that changes could be made to make it easier for European countries to participate in the IRA.